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I don't particularly like this city and haven't played with it much, but I'll still share some thoughts.
The tactic of demon production has already been mentioned... it's a generally good tactic, but in my opinion, you shouldn't deliberately try to turn as many of your own troops into demons as possible. Instead, you can use it to quickly replenish losses during a battle, especially among lower-tier units. You can also transform creatures of other races obtained from neutral dwellings.
It's not advisable to transform Cerberuses into demons – they are quite useful monsters.
Gradually, you'll accumulate a sizable melee unit that can be very effectively used in the final battle.
In the Inferno mage guild, fire magic drops much more often, which can be very helpful in combination with a horde of demons. That is, cast Expert Fire Shield on the demons and teleport them (or just move them) to the thick of the battle, without worrying too much about them. You can first teleport them to the archers and then, at the beginning of the next round, cast Fire Shield – it depends on the circumstances. The rather controversial spell, Fury (increases attack, reduces defense), combined with Fire Shield, can severely damage the enemy. You can use this when most of the demons have already died, i.e., when it's the demon's turn, cast Fury on them, and attack the strongest enemy units, dealing massive damage in a direct attack – plus the enemy's counterattack combined with the Fire Shield – that's two. If the enemy gets Lucky at this point, you can say that you're the lucky one, not them – the more damage the Fire Shield will do.
Next, use the Sadomasochists and, in one turn, without worrying, resurrect all the demons, and then repeat the above operation if possible.
You can also find a use for Sacrifice – instantly resurrect useful units at the moment by sacrificing useless ones (for example, archers hopelessly stuck in a bad position). Sadomasochists have very close health to demons but are noticeably stronger than them – this can be used at the end of the battle; sacrifice the remaining melee demons and resurrect a much more powerful unit in one go.
The hero should try to improve defensive skills.
It would also be good to enhance one of the advantages of Inferno creatures – their movement speed on the battlefield. That is, items that increase speed would be preferable for them over items that simply enhance skills. In this case, even mass slowing won't significantly affect combat effectiveness. The hero needs, at a minimum, fire magic (as a secondary skill), armor, and intelligence.
In general, it would be good if the enemy hero ran out of mana sooner. This can be facilitated by the ability of Imps to absorb a decent percentage of mana from the enemy's spell.
You can use Fire Wall – place it in front of the enemy archers if you can't attack them (if you know in advance that the enemy will have time to protect them).
I think the following heroes are good: Nimues, Xiron, Ksarphax, and, as starting heroes, Kal and Octavia.